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EU's DAC9 proposal simplifies tax compliance for multinationals with new forms, info exchange, and timelines under Pillar 2 Directive.
DAC9 essentially aims to ensure a global minimum level of taxation (15%) for multinational enterprise groups (MNEs) and large-scale domestic groups (LSDGs) in the EU. The purpose of DAC9 is to make it easier for MNEs to comply with their Pillar Two obligations by allowing them to file only one top-up tax information return at central level for the entire group. This is instead of individual local filings for each constituent entity of the group. This will simplify the filing process and reduce the administrative obligation, making it easier (and potentially cheaper) for MNEs to comply with their filing obligations. To achieve this, the proposal:
- Introduces a standard form, in line with the Global Anti-Base Erosion Rules (GloBE) Information Return (GIR) developed by the Inclusive Framework of the OECD and the G20, which MNEs and LSDGs will have to use to report certain tax-related information; and
- Sets up a system for tax authorities to exchange information with each other following a ‘dissemination approach’.
The form will also help ensure that MNEs and LSDGs provide the same information in the same format, making it easier for them to fulfill their filing obligations and for the tax authorities of EU member states to assess and exchange it. The Commission will also be able to update the form in line with any changes brought in at a later date that are agreed at an international level. This will facilitate a swift alignment. We expect the Commission will also provide guidance on any future changes.
Once adopted by the EU Council, member states will have until 31 December 2025 to implement DAC9. For member states that have chosen to delay implementing the Pillar Two Directive, the same deadline will apply for the implementation of DAC9. MNEs are expected to file their first top-up tax information return by 30 June 2026, as required under the Pillar Two Directive. The relevant tax authorities must exchange this information with each other by 31 December 2026.
Summary
On 28 October, the European Commission adopted the DAC9 proposal to update the Directive on administrative cooperation in taxation, simplifying compliance with the Pillar 2 Directive. DAC9 ensures a 15% global minimum tax for multinational and large-scale domestic groups in the EU. It introduces a standardized form for reporting tax-related information, reducing administrative burdens and facilitating information exchange among tax authorities. EU member states must implement DAC9 by 31 December 2025, with the first top-up tax information return due by 30 June 2026. Tax authorities must exchange this information by 31 December 2026.